## Section 1 — Report on Government Finance Statistics Mission (June 10–14, 2019) ## Source details **Canonical URL:** [Section 1 — Report on Government Finance Statistics Mission (June 10–14, 2019)](https://www.imf.org/-/media/files/publications/cr/2020/english/1vnmea2020001.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2020/english/1vnmea2020001.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2020/english/1vnmea2020001.pdf.json) --- ### Summary of mission outcomes and priority recommendations - Mission team: Anthony Olliffe (GFS expert), Nguyen Thi Van Anh (Economist, IMF Resident Representative Office), Nguyen Phuong Anh (Public Sector Specialist, World Bank). - Main purpose: Continue TA to assist with upgrading the compilation and dissemination of fiscal data and GFS in Vietnam in line with the Government Finance Statistics Manual 2014 (GFSM 2014). - Main objectives achieved: - Reviewed GFS data produced from the State Budget Balances (SBB). The authorities have updated data from 2003 to 2013 consistent with GFS data provided for three additional years (2014 to 2016). This data was reviewed post mission and, after release approval from the MOF, will be used to update the Government Finance Statistics Yearbook (GFSY). - Bridge tables were agreed with the authorities. The MOF still regard differences between Treasury and Budget Management Information System (TABMIS) and SBB final accounts as an impediment to using the economic classification of the bridge table to produce GFS data from TABMIS. However, there is acknowledgement by the MOF that there are now a smaller number of differences. - Road-map for further implementation of GFS discussed; includes using the 2018 National Financial Statements (to be published in 2020) to provide GFS data on assets and liabilities and using GFS data to improve fiscal analysis. - Changes to “GFS Manual for Vietnam” were identified to enable its finalization. Chapter I was finalized during the mission; drafting guidelines were provided to enable completion of Chapter II; Chapter III will be finalized once Chapter II is complete and the road-map is agreed by MOF. - Table 1: Priority recommendations (excerpt) - December 2019 — Produce a national GFS compilation and procedures manual, to encourage a demand side interest in GFS. Responsible: Expert working directly with State Budget Department (SBD) funded by the WB. - June 2020 — Produce annual GFS data from TABMIS using the bridge tables for reporting to the IMF. Responsible: SBD and IMF/WB. ### Detailed technical assessment and recommendations — A. Institutional and data coverage of the General Government and Public Sectors - General government sector (GGS) structure: - Four levels: central, provincial, district, and commune. - Central government: budgetary central government, extrabudgetary funds including Social Security funds, and public service delivery agencies that generally provide government services but are increasingly charging for goods and services. - Sub-national governments: classified as local governments and comprise 63 provinces, approximately 700 districts, and over 11,000 communes, wards, and district towns. In addition, there are 12 extrabudgetary funds that are managed by sub-national governments. - State Budget and decentralization: - State Budget covers all levels of government and is managed as a decentralized system within a unitary system of government. - About half of the expenditure on public services is the responsibility of sub-national governments; they are assigned own revenue sources and shortfalls are made good by equalization transfers. - TABMIS and SBB: - With World Bank assistance, VST launched TABMIS in early 2013. - TABMIS is a primary source for published SBB, but TABMIS data does not reflect all final annual audit adjustments; published SBB is compiled manually by SBD and excludes extrabudgetary funds and own-source revenue/expenditure of public service delivery agencies. - Future GFS project phase (JSA3) will seek to cover extrabudgetary funds. ### Detailed technical assessment and recommendations — B. Accounting and statistical reporting - Current institutional coverage in GFSY is limited to the State Budget (budget GGS). - GFSY data history and updates: - GFS TA missions in 2015 compiled GFSY data from 2003–2013 extracted from published SBB. - Additional GFS data for 2014 to 2016 was provided to the mission and updated data back to 2003 consistent with those years was provided. - Expenditure detail limitations: - GFSY tables compiled from SBB do not include detailed economic categories of current expenditure (e.g., wages and salaries) because SBB presents current expenditure only by function. - TABMIS provides economic classification detail; priority objective is to produce more complete annual GFS data from TABMIS using bridge tables. - Carry-over of budgets and cash recording: - State Budget Law permits various carry-overs (capital expenditures, procurement commitments, wage policy earmarks, block grants, supplementary budgets after September 30, allocated research budgets, budgetary savings). - Carry-over expenditures are accounted as carry-over revenue in the following year, creating double counting of both expenditure and revenues in SBB final accounts. - Vietnam GFS records only actual cash flows in each fiscal year; carryover revenues and expenditures are therefore excluded. ### Detailed technical assessment and recommendations — C. GFS Manual for Vietnam - Legal and PFM context: Revised State Budget Law (2015), Accounting Law (2016), Public Debt Management Law (2017), Public Asset Management Law (2017) include PFM reforms in budget classification, accounting standards, charts of accounts, debt management, and asset management. - Purpose and structure of the manual: - The MOF requested a “GFS Manual for Vietnam”; work commenced during the June 2017 GFS mission with World Bank AAA funding supporting draft development. - Manual comprises three chapters: - Chapter I: Overview of GFS — finalized during the mission. - Chapter II: Background of Vietnam GFS — includes debt management, asset registries, accounting standards, planned National Financial Statements, and a road-map for further development of GFS. Detailed drafting guidelines provided to departments to complete Chapter II. - Chapter III: Technical Guidance on Reporting GFS — to be finalized once Chapter II and the road-map are agreed by MOF. - The manual is a “living document” and should be regularly updated. - Recommended actions: - Publish the “GFS Manual for Vietnam” by the end of 2019 as agreed with authorities. - Disseminate the GFS manual to statistical staff, financial staff, and financial academy for wider use. ### Detailed technical assessment and recommendations — D. Updated GFSY Data - Bridge tables and COA mapping: - Under the first JSA funded GFS project (2012–2015), bridge tables were developed mapping the Chart of Accounts (COA) economic classification to GFSM 2014 to automate GFS table generation from TABMIS. - MOF continues to see differences between TABMIS and audited SBB final accounts as an impediment to using the bridge table economic classification; MOF acknowledges a smaller number of differences and that differences may not be material for GFS reporting. - GFSY update status: - GFS TA in 2015 produced GFSY data for 2003–2013 with limited expenditure detail. - Authorities updated data back to 2003 consistent with additional years 2014–2016; these updates were reviewed and agreed post mission. - Recommended actions: - MOF approve the update of GFS data and, after release approval from the MOF, update the Government Finance Statistics Yearbook (GFSY) from 2003 to 2016. - MOF to generate GFS tables from TABMIS for one year to assess whether differences between final annual data and TABMIS are material for GFS reporting. ### Detailed technical assessment and recommendations — E. Road-map for further development of GFS - Priority items: Produce the “GFS Manual for Vietnam” and produce annual GFS data from TABMIS using bridge tables. - Benefits of ongoing TABMIS-based GFS production: - Provides additional expense data categories to improve fiscal analysis. - Enables reconciliation of the deficit with below-the-line financing data once annual GFS from TABMIS is established. - Supplementary financing data necessary for reconciliation: - Segment 2 of the CoA that records cash and investments (also mapped to GFS). - External debt data from the Debt Management Department. - Higher frequency data: - SBD publishes quarterly SBB data that can be mapped to GFS for higher frequency GFS output. - Quarterly data can also be produced from TABMIS with additional expenditure detail. - Assets and liabilities: - Publication of the 2018 National Financial Statement in 2020 will assist compilation of GFS assets and liabilities. - A balance sheet would show assets and liabilities, giving a comprehensive picture of public wealth and wider public sector coverage due to inclusion of extrabudgetary funds. ### Detailed technical assessment and recommendations — F. Other mission tasks and functional classification mapping - Discussions with World Bank on mapping COFOG, recurrent functional classification, and MPI capital classification. - State Budget classifies expenditure to 13 functional categories; MPI classifies capital investment to 20 sectors and industries. - Initial review shows higher level categories can be broadly mapped to 10 major COFOG functions; mission proposed minimal changes. - Recommended actions to MPI and MOF: - Review Decision 40 on MPI classification to enable detailed mapping to the recurrent functional classification used by MOF; provide recommendations to MPI to revise classification and adopt it for budget allocation and reporting. - Disaggregate “economic services” in recurrent functional expenditure classification to sectors (transport, agriculture, tourism, etc.) to align with MPI categories. - Split MPI category 19 Defense and Security into 2 separate categories to be consistent with COFOG and SBD. - Remove MPI category 19 Industry as it relates to many SBL and COFOG categories; consider allocating Industry to SBL National Defense, Social Order and Safety, and Economic Services. - Split MPI category 5 Water supply, Waste Water and Waste Treatment: assign housing and water supply to a new Housing and Community Amenities category while waste water and treatment remain in category 5 to be consistent with COFOG and SBD environment protection function. - Merge MPI category 13 Information Technology into Science and Technology to reduce differences with SBD functional classification. ### Detailed technical assessment and recommendations — G. Officials met during the mission (selected) - Representatives from VST, Public Asset Management Department, Debt Management and External Finance Department, Accounting & Auditing Supervisory Department, Public Expenditure Department, Corporate Finance Department, Price Surveillance Department, Financial Officer Training School, State Budget Department. - Notable names and positions included (as listed in the mission): Nguyen Van Hao (Deputy Director General, State Accounting Department—VST), Nguyen Minh Tan (Deputy Director General, State Budget Department), among others. ### Appendix I (excerpt) - Priority recommendation from January 2018 mission: Produce a revised draft of the “GFS manual for Vietnam” by early March 2018 to allow further comments before the June 2018 workshop. Comment: Revised drafts were produced since January 2018 and MOF plan is to publish the manual by December 2019. *Source: Report on Government Finance Statistics Mission (June 10–14, 2019), IMF Country Report No. 20/230 — Section 1.* ### Section 2 ### Workshop preparation and delivery - Prepare for the June 2018 workshop including development of an agenda, training materials and presentations from experts on accrual accounting, CoA and consolidation to support the production of the State Financial Statements. - Achieved. A successful workshop was conducted. ### Review of historical data and release - Review data for years from 2014 prepared by the SBD at the June 2018 workshop and request for its release to the GFSY. - Data for years from 2014 have been reviewed since the June 2018 workshop and were agreed after the June 2019 mission (Appendix II). *Source: 1vnmea2020001 - Section 2.* ### Section 1 ### Section 1 — Report on Government Finance Statistics Mission (June 10–14, 2019) ### Summary of mission outcomes and priority recommendations - Mission team: Anthony Olliffe (GFS expert), Nguyen Thi Van Anh (Economist, IMF Resident Representative Office), Nguyen Phuong Anh (Public Sector Specialist, World Bank). - Main purpose: Continue TA to assist with upgrading the compilation and dissemination of fiscal data and GFS in Vietnam in line with the Government Finance Statistics Manual 2014 (GFSM 2014). - Main objectives achieved: - Reviewed GFS data produced from the State Budget Balances (SBB). The authorities have updated data from 2003 to 2013 consistent with GFS data provided for three additional years (2014 to 2016). This data was reviewed post mission and, after release approval from the MOF, will be used to update the Government Finance Statistics Yearbook (GFSY). - Bridge tables were agreed with the authorities. The MOF still regard differences between Treasury and Budget Management Information System (TABMIS) and SBB final accounts as an impediment to using the economic classification of the bridge table to produce GFS data from TABMIS. However, there is acknowledgement by the MOF that there are now a smaller number of differences. - Road-map for further implementation of GFS discussed; includes using the 2018 National Financial Statements (to be published in 2020) to provide GFS data on assets and liabilities and using GFS data to improve fiscal analysis. - Changes to “GFS Manual for Vietnam” were identified to enable its finalization. Chapter I was finalized during the mission; drafting guidelines were provided to enable completion of Chapter II; Chapter III will be finalized once Chapter II is complete and the road-map is agreed by MOF. - Table 1: Priority recommendations (excerpt) - December 2019 — Produce a national GFS compilation and procedures manual, to encourage a demand side interest in GFS. Responsible: Expert working directly with State Budget Department (SBD) funded by the WB. - June 2020 — Produce annual GFS data from TABMIS using the bridge tables for reporting to the IMF. Responsible: SBD and IMF/WB. ### Detailed technical assessment and recommendations — A. Institutional and data coverage of the General Government and Public Sectors - General government sector (GGS) structure: - Four levels: central, provincial, district, and commune. - Central government: budgetary central government, extrabudgetary funds including Social Security funds, and public service delivery agencies that generally provide government services but are increasingly charging for goods and services. - Sub-national governments: classified as local governments and comprise 63 provinces, approximately 700 districts, and over 11,000 communes, wards, and district towns. In addition, there are 12 extrabudgetary funds that are managed by sub-national governments. - State Budget and decentralization: - State Budget covers all levels of government and is managed as a decentralized system within a unitary system of government. - About half of the expenditure on public services is the responsibility of sub-national governments; they are assigned own revenue sources and shortfalls are made good by equalization transfers. - TABMIS and SBB: - With World Bank assistance, VST launched TABMIS in early 2013. - TABMIS is a primary source for published SBB, but TABMIS data does not reflect all final annual audit adjustments; published SBB is compiled manually by SBD and excludes extrabudgetary funds and own-source revenue/expenditure of public service delivery agencies. - Future GFS project phase (JSA3) will seek to cover extrabudgetary funds. ### Detailed technical assessment and recommendations — B. Accounting and statistical reporting - Current institutional coverage in GFSY is limited to the State Budget (budget GGS). - GFSY data history and updates: - GFS TA missions in 2015 compiled GFSY data from 2003–2013 extracted from published SBB. - Additional GFS data for 2014 to 2016 was provided to the mission and updated data back to 2003 consistent with those years was provided. - Expenditure detail limitations: - GFSY tables compiled from SBB do not include detailed economic categories of current expenditure (e.g., wages and salaries) because SBB presents current expenditure only by function. - TABMIS provides economic classification detail; priority objective is to produce more complete annual GFS data from TABMIS using bridge tables. - Carry-over of budgets and cash recording: - State Budget Law permits various carry-overs (capital expenditures, procurement commitments, wage policy earmarks, block grants, supplementary budgets after September 30, allocated research budgets, budgetary savings). - Carry-over expenditures are accounted as carry-over revenue in the following year, creating double counting of both expenditure and revenues in SBB final accounts. - Vietnam GFS records only actual cash flows in each fiscal year; carryover revenues and expenditures are therefore excluded. ### Detailed technical assessment and recommendations — C. GFS Manual for Vietnam - Legal and PFM context: Revised State Budget Law (2015), Accounting Law (2016), Public Debt Management Law (2017), Public Asset Management Law (2017) include PFM reforms in budget classification, accounting standards, charts of accounts, debt management, and asset management. - Purpose and structure of the manual: - The MOF requested a “GFS Manual for Vietnam”; work commenced during the June 2017 GFS mission with World Bank AAA funding supporting draft development. - Manual comprises three chapters: - Chapter I: Overview of GFS — finalized during the mission. - Chapter II: Background of Vietnam GFS — includes debt management, asset registries, accounting standards, planned National Financial Statements, and a road-map for further development of GFS. Detailed drafting guidelines provided to departments to complete Chapter II. - Chapter III: Technical Guidance on Reporting GFS — to be finalized once Chapter II and the road-map are agreed by MOF. - The manual is a “living document” and should be regularly updated. - Recommended actions: - Publish the “GFS Manual for Vietnam” by the end of 2019 as agreed with authorities. - Disseminate the GFS manual to statistical staff, financial staff, and financial academy for wider use. ### Detailed technical assessment and recommendations — D. Updated GFSY Data - Bridge tables and COA mapping: - Under the first JSA funded GFS project (2012–2015), bridge tables were developed mapping the Chart of Accounts (COA) economic classification to GFSM 2014 to automate GFS table generation from TABMIS. - MOF continues to see differences between TABMIS and audited SBB final accounts as an impediment to using the bridge table economic classification; MOF acknowledges a smaller number of differences and that differences may not be material for GFS reporting. - GFSY update status: - GFS TA in 2015 produced GFSY data for 2003–2013 with limited expenditure detail. - Authorities updated data back to 2003 consistent with additional years 2014–2016; these updates were reviewed and agreed post mission. - Recommended actions: - MOF approve the update of GFS data and, after release approval from the MOF, update the Government Finance Statistics Yearbook (GFSY) from 2003 to 2016. - MOF to generate GFS tables from TABMIS for one year to assess whether differences between final annual data and TABMIS are material for GFS reporting. ### Detailed technical assessment and recommendations — E. Road-map for further development of GFS - Priority items: Produce the “GFS Manual for Vietnam” and produce annual GFS data from TABMIS using bridge tables. - Benefits of ongoing TABMIS-based GFS production: - Provides additional expense data categories to improve fiscal analysis. - Enables reconciliation of the deficit with below-the-line financing data once annual GFS from TABMIS is established. - Supplementary financing data necessary for reconciliation: - Segment 2 of the CoA that records cash and investments (also mapped to GFS). - External debt data from the Debt Management Department. - Higher frequency data: - SBD publishes quarterly SBB data that can be mapped to GFS for higher frequency GFS output. - Quarterly data can also be produced from TABMIS with additional expenditure detail. - Assets and liabilities: - Publication of the 2018 National Financial Statement in 2020 will assist compilation of GFS assets and liabilities. - A balance sheet would show assets and liabilities, giving a comprehensive picture of public wealth and wider public sector coverage due to inclusion of extrabudgetary funds. ### Detailed technical assessment and recommendations — F. Other mission tasks and functional classification mapping - Discussions with World Bank on mapping COFOG, recurrent functional classification, and MPI capital classification. - State Budget classifies expenditure to 13 functional categories; MPI classifies capital investment to 20 sectors and industries. - Initial review shows higher level categories can be broadly mapped to 10 major COFOG functions; mission proposed minimal changes. - Recommended actions to MPI and MOF: - Review Decision 40 on MPI classification to enable detailed mapping to the recurrent functional classification used by MOF; provide recommendations to MPI to revise classification and adopt it for budget allocation and reporting. - Disaggregate “economic services” in recurrent functional expenditure classification to sectors (transport, agriculture, tourism, etc.) to align with MPI categories. - Split MPI category 19 Defense and Security into 2 separate categories to be consistent with COFOG and SBD. - Remove MPI category 19 Industry as it relates to many SBL and COFOG categories; consider allocating Industry to SBL National Defense, Social Order and Safety, and Economic Services. - Split MPI category 5 Water supply, Waste Water and Waste Treatment: assign housing and water supply to a new Housing and Community Amenities category while waste water and treatment remain in category 5 to be consistent with COFOG and SBD environment protection function. - Merge MPI category 13 Information Technology into Science and Technology to reduce differences with SBD functional classification. ### Detailed technical assessment and recommendations — G. Officials met during the mission (selected) - Representatives from VST, Public Asset Management Department, Debt Management and External Finance Department, Accounting & Auditing Supervisory Department, Public Expenditure Department, Corporate Finance Department, Price Surveillance Department, Financial Officer Training School, State Budget Department. - Notable names and positions included (as listed in the mission): Nguyen Van Hao (Deputy Director General, State Accounting Department—VST), Nguyen Minh Tan (Deputy Director General, State Budget Department), among others. ### Appendix I (excerpt) - Priority recommendation from January 2018 mission: Produce a revised draft of the “GFS manual for Vietnam” by early March 2018 to allow further comments before the June 2018 workshop. Comment: Revised drafts were produced since January 2018 and MOF plan is to publish the manual by December 2019. *Source: Report on Government Finance Statistics Mission (June 10–14, 2019), IMF Country Report No. 20/230 — Section 1.* ### Section 2 ### Section 2 ### Workshop preparation and delivery - Prepare for the June 2018 workshop including development of an agenda, training materials and presentations from experts on accrual accounting, CoA and consolidation to support the production of the State Financial Statements. - Achieved. A successful workshop was conducted. ### Review of historical data and release - Review data for years from 2014 prepared by the SBD at the June 2018 workshop and request for its release to the GFSY. - Data for years from 2014 have been reviewed since the June 2018 workshop and were agreed after the June 2019 mission (Appendix II). *Source: 1vnmea2020001 - Section 2.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1vnmea2020001.pdf_